Critical Contrast: NOV (NYSE:NOV) versus Select Water Solutions (NYSE:WTTR)

NOV (NYSE:NOV) and Select Water Solutions (NYSE:WTTR) are both mid-cap energy companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings for NOV and Select Water Solutions, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NOV	2	9	5	0	2.19
Select Water Solutions	0	3	7	0	2.70

NOV currently has a consensus target price of $21.23, indicating a potential upside of 12.01%. Select Water Solutions has a consensus target price of $24.57, indicating a potential upside of 24.30%. Given Select Water Solutions’ stronger consensus rating and higher probable upside, analysts plainly believe Select Water Solutions is more favorable than NOV.

Dividends

NOV pays an annual dividend of $0.36 per share and has a dividend yield of 1.9%. Select Water Solutions pays an annual dividend of $0.28 per share and has a dividend yield of 1.4%. NOV pays out 138.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Select Water Solutions pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NOV has increased its dividend for 1 consecutive years and Select Water Solutions has increased its dividend for 2 consecutive years.

Profitability

This table compares NOV and Select Water Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NOV	1.10%	3.44%	1.94%
Select Water Solutions	2.24%	3.11%	1.92%

Institutional and Insider Ownership

93.3% of NOV shares are held by institutional investors. Comparatively, 81.7% of Select Water Solutions shares are held by institutional investors. 1.1% of NOV shares are held by insiders. Comparatively, 6.2% of Select Water Solutions shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

NOV has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, Select Water Solutions has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Valuation & Earnings

This table compares NOV and Select Water Solutions”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NOV	$8.74 billion	0.77	$145.00 million	$0.26	72.90
Select Water Solutions	$1.41 billion	1.95	$21.22 million	$0.28	70.60

NOV has higher revenue and earnings than Select Water Solutions. Select Water Solutions is trading at a lower price-to-earnings ratio than NOV, indicating that it is currently the more affordable of the two stocks.

Summary

Select Water Solutions beats NOV on 10 of the 17 factors compared between the two stocks.

About NOV

NOV Inc. designs, constructs, manufactures, and sells systems, components, and products for oil and gas drilling and production, and industrial and renewable energy sectors in the United States and internationally. It operates through two segments, Energy Equipment, and Energy Products and Services. The company provides solids control and waste management equipment and services, managed pressure drilling, drilling fluids, premium drillpipe, wired pipe, drilling optimization services, tubular inspection and coating services, instrumentation, downhole tools, and drill bits. It also offers equipment and technologies for hydraulic fracture stimulation, including downhole multistage fracturing tools, pressure pumping trucks, blenders, sanders, hydration and injection units, flowline, and manifolds; coiled tubing units, and wireline units and tools; connections and liner hangers; onshore production consists of composite pipe, surface transfer and progressive cavity pumps, and artificial lift systems; and offshore production, such as floating production systems and subsea production technologies, as well as manufactures industrial pumps and mixers. In addition, the company provides substructures, derricks, and masts; cranes; jacking systems; pipe lifting, racking, rotating, and assembly systems; mud pumps; pressure control equipment; drives and generators; rig instrumentation and control systems; mooring, anchor, and deck handling machinery; equipment components for offshore wind construction vessels; and pipelay and construction systems. Further, the company offers spare parts, repair, and rentals as well as comprehensive remote equipment monitoring, technical support, field service, and customer training. The company was formerly known as National Oilwell Varco, Inc. and changed its name to NOV Inc. in January 2021. NOV Inc. was founded in 1862 and is based in Houston, Texas.

About Select Water Solutions

Select Water Solutions, Inc., together with its subsidiaries, provides water management and chemical solutions to the energy industry in the United States. The company operates through three segments: Water Services, Water Infrastructure, and Chemical Technologies. The Water Services segment provides water-related services, including water sourcing, water transfer, flowback and well testing, water containment, fluids hauling, water monitoring, and water network automation; technology solutions comprising hydrographic mapping, water volume and quality monitoring, remote pit and tank monitoring, leak detection, asset and fuel tracking, and automated-equipment services, as well as various surface rental equipment and workforce accommodation services. The Water Infrastructure segment engages in the recycling, gathering, transferring, and disposal of water through a network of permanent pipeline infrastructure, semi-permanent pipeline infrastructure, water recycling facilities, earthen pits, water sources, and SWDs; provides solids management services; and develops, builds, and operates semi-permanent and permanent infrastructure solutions. The Chemical Technologies segment provides technical solutions, products, and services related to chemical applications in the oil and gas industry. This segment develops, manufactures, and manages logistics; and provides chemicals used in hydraulic fracturing, stimulation, cementing, and well completions for pressure pumpers and oil and gas producers, as well as offers production chemical solutions for underperforming wells, corrosion and scale monitoring, chemical inventory management, well failure analysis, and lab services. It primarily serves oil and gas producers. The company was formerly known as Select Energy Services, Inc. and changed its name to Select Water Solutions, Inc. in May 2023. Select Water Solutions, Inc. was incorporated in 2016 and is headquartered in Houston, Texas.